Earlier this month, the federal government has launced rules to help facilitate short sales. Some homeowners are unable to complete a short sale or those who don't qualify for one may have an alternative to forclosure.
Such an alternative is a "deed in lieu of foreclosure," an agreement which allows you to voluntarily turn the deed to your house over to the lender.
This option often allows the homeowners to negotiate more favorable exit terms than what a foreclosure would allow. This includes staying in the home for a longer period of time, for several extra months, or even potentially lessening the negative impact on their credit.
The possibility of saving tens of thousands of dollars in legal fees and other foreclosure costs, lenders may be more willing to go for the agreement.
If this is something that may be of benefit to you, we encourage you to contact your lender and discuss your options. In order to get the most favorable outcome, communication with your lender is crucial.
While communicating with your lender, be sure to document everything from certified letters to your phone calls.
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